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Motor Accident Compensation LawSupreme Court of India

Maya Singh and Others v. The Oriental Insurance Co. Ltd. and Others

Civil Appeal · 2025 INSC 161Decided 7 Feb 2025
Civil Appeal No. ___ of 2025 (arising out of SLP (C) No. 30398 of 2019)
Justice J.K. Maheshwari · Justice Rajesh Bindal

Background

Laxman Das Mahour, a BSNL phone mechanic in his late fifties, was struck and killed by a bus while walking after getting off another bus. His widow, son and daughter sought compensation, and the Motor Accident Claims Tribunal awarded them about Rs. 28.67 lakh. On appeal by the insurance company, the Madhya Pradesh High Court reduced this to about Rs. 19.67 lakh by applying a "split multiplier" method, calculating compensation separately for his pre-retirement salary years and his expected post-retirement pension years. The family appealed to the Supreme Court against this reduction.

Decision Breakdown

The Supreme Court held that the High Court erred in applying the split multiplier method without recording any special reasons for departing from the standard multiplier approach laid down in Sarla Verma v. DTC, reaffirming that such deviation requires specific justification, not merely the fact that the deceased was nearing retirement. Applying the standard multiplier of 9 to the deceased's income, adding the mandatory 15% for future prospects, and restoring fuller amounts for loss of consortium, loss of estate and funeral expenses, the Court raised the total compensation to about Rs. 33.03 lakh.

Lesson Learnt

In motor accident compensation cases, courts and tribunals must apply the standard age-based multiplier method set out in Sarla Verma as the default rule; a "split multiplier" that treats pre- and post-retirement income differently can only be used if the court records specific reasons justifying that departure.

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